Surprises From The 2016 Budget

Posted by siteadmin on Tuesday 22nd of March 2016.

So what emerged from the 2016 Budget? As is often the case these days, much of the answer is to be found in the previous year’s Autumn Statement or earlier announcements. However, alongside the normal crop of re-announcements Mr Osborne, like his predecessors, could not resist adding a few surprises on his big day, both good and bad:

  • A rise of £400 in the personal allowance to £11,000 for 2016/17 and a further increase to £11,500 in 2017/18.
  • A £615 rise in the higher rate threshold for 2016/17, to £43,000 and a £2,000 increase in 2017/18 to £45,000, clawing back part of the under-indexation of earlier years.
  • A cut in the rates of capital gains tax to 20% for higher and additional rate taxpayers and 10% for other taxpayers from 2016/17. However, the current rates of 28% and 18% will continue for gains on residential property and carried interest.
  • A new Investors’ Relief, similar to Entrepreneurs’ Relief, for lifetime gains of up to £10 million on newly issued shares in unlisted trading companies.
  • A new employer Class 1 National Insurance contribution (NIC) exemption for apprentices aged under 25 earning up to £827 a week.
  • The introduction from April 2017 of a new Lifetime ISA for the under-40s, with a maximum annual contribution of £4,000 and a 25% government bonus.
  • An increase in the main ISA allowance to £20,000 from 2017/18.
  • Reform of business rates and a permanent doubling of the small business rates relief.
  • Two new £1,000 tax allowances for trading income and property income, starting in 2017/18.

If you need further information on how you will be affected personally, you are strongly recommended to consult your financial adviser.